Ticker: CMO-PE, Buy below $25.
Capstead Mortgage is a publicly traded residential mortgage REIT.
Why I Would Buy
- Below Par – This preferred is trading below par, allowing for an immediate whenever this security gets called.
- Yield – Greater than 7%
- Insider Buying – The common shares have experienced a good amount of insider buying, signaling the management’s confidence in the company’s health and longevity.
- Cumulative – The common stock can’t receive a cent in dividends until the preferreds get their due first.
What Could Go Wrong
- Past Call Date – This preferred was eligible for redemption in May/2018, and may get called away anytime.
Disclosure: I am long CMO-PE, please read additional disclosures here before taking any action based on this post.